Rent vs Buy Calculator
Should you rent or buy a home? Compare the true cost of renting vs buying over time, including mortgage, taxes, maintenance, and home equity.
Renting
Buying
| Year | Rent cost | Buy cost (net) | Better to |
|---|
Our rent vs buy calculator compares the true long-term cost of renting versus buying a home. It accounts for mortgage payments, property taxes, home appreciation, and the equity you build — so you can see exactly when (or if) buying beats renting in your situation.
How the calculation works
True cost of renting is simply the total rent you pay over the period, with your chosen annual rent increase applied each year.
True cost of buying is more complex: it includes upfront buying closing costs (assumed 3% of purchase price), all mortgage payments, annual property taxes, and annual maintenance (assumed 1% of home value) — minus the net equity you receive when you sell (home appreciated value less 6% selling costs and remaining mortgage balance).
What's not included
This calculator omits a few factors for simplicity. It does not include the opportunity cost of the down payment (money that could otherwise be invested), homeowner's insurance, HOA fees, or mortgage interest tax deductions. For a comprehensive personal decision, consider speaking with a financial advisor.
When does buying beat renting?
Buying typically wins over longer time horizons because you build equity and benefit from appreciation. Renting often wins in the short term due to high upfront buying and selling costs. The break-even point depends heavily on your local market, interest rates, and how quickly home prices appreciate.
Key factors that affect the decision
| Factor | Favours renting | Favours buying |
|---|---|---|
| Time horizon | Short (< 5 years) | Long (> 7 years) |
| Interest rates | High rates | Low rates |
| Home appreciation | Flat or falling market | Rising market |
| Rent increases | Low / rent-controlled | High / unpredictable |
| Down payment | Small (high PMI) | 20%+ available |